Thursday, September 29, 2011

When a Job Isn't a Job

By Christa Tinsley Spaht, Project Manager.

Last Friday was International Freelancers Day. It is only the second such annual holiday, but in honor of that auspicious occasion, the inventors of International Freelancers Day released their2011 Freelance Industry Report. Like other recent research on this hard-to-track workforce, the report is informed by a voluntary survey of freelance workers. In addition, this month MBO Partners released its first-everState of Independent America report.

The findings of both these reports reflect a workforce happy and satisfied with their work, who prefer flexibility and independence, who like being experts in their fields and the variety of work and clients. MBO’s report finds that 63% of independent workers want to remain fully independent, while only 12% would like to grow their businesses. (Another 19% do in fact intend to return to traditional employment.)

Various names for this workforce trend – the gig economy, the freelance economy, the 1099 economy (for the IRS form completed by independent contractors), the “you’re in charge” economy – and new studies have attempted to define what this squirrelly bunch of workers are all about and if this is a short-term reaction to an unstable economic climate or a long-term and significant shift in the nature of people do work. Sara Horowitz atThe Atlantichas been covering this for a while and calls it “the industrial revolution of our time.”

Monthly releases by the BLS send analysts, journalists, and academics scrambling to back-count what the “real” unemployment rate is, given the number of people who have dropped out of the workforce – the hidden unemployed. But what about the hidden employed, the contract workers and freelancers who don’t get counted in BLS’ traditional methodology? This is hard to unpack from federally-released data; piecing together non-covered worker and nonemployer statistics from various federal data sources doesn’t come close to a clear answer.

While government researchers are slow to acknowledge and report this long-term trend, proprietary data sources and some of the reports cited above are trying to nail down better figures. But I’ve read estimates of the share of 1099 or contract workers ranging from one-fifth to one-third of the total national workforce. Whatever that concentration is, it’s growing in every state.

Anecdotally and off the top of my head I can think of about a dozen of my own friends in these independent jobs – freelancers, contractors, and consultants. Some of them are contracting for a sole proprietorship or small non-profit, but others are at huge corporations. At Coca-Cola headquarters, just down the street from Market Street’s offices, full-time employees wear red name tags while black tags are for contract or “non-employed” workers (NEW). Yes, that’s what Coca-Cola calls them. Not employed or unemployed – what the BLS counts – butnon-employed.

Many contract positions look like formal employment from the outside (e.g. Coca-Cola’s contractors), but they don’t “feel” as stable or long-term. Additionally, they don’t offer the benefits of full-time, permanent employment – health insurance, paid leave, and even parking spaces and access to other workplace amenities that the W-2 workforce has traditionally expected. But in this “new normal” of economic discomfort and job uncertainty, what share of any region’s traditional full-time employment is actually stable or long-term? Do the independent workers at least feel more in control of their destiny from project to project than the permanent worker dreading the next time the axe will fall?

As we grapple with quantifying the breadth and depth of this independent bunch of workers, it’s still critical for economic and workforce development practitioners to understand the characteristics of these workers and the work they’re doing.

1099 workers don’t just live in New York City and Los Angeles, jumping from one movie set or short-term creative project to another. They aren’t just working from coffee shops and their spare rooms, but in traditional corporate and public settings at major technology firms, engineering practices, governments, and universities. They’re not frantically piecing together whatever work they can find while praying for a “real” job – they like being autonomous with their work and time. And that means a lot of freelancers and consultants might not really want to grow in such a way that they have to hire employees eventually. They want to be their own bosses and no one else’s. This flies in the face of some entrepreneurial and small business development programs.

We’ve come to expect the ongoing churn within once-stable business sectors, and we know that new skills are needed to negotiate the occupational flux in this constant state of transition, but not enough conversation is being facilitated on the ground floor about how this changes the very nature of work and what a job is. Ventura, CA Mayor William Fulton penned a wonderful piece inGoverningthis spring challenging the economic development profession to think about this reality. “What happens when there really is no such thing as a ‘job’ anymore?” he asks. “How do you practice the art of economic development?”

This is a difficult question to pose chambers of commerce and economic development organizations that rely on dues, support, partnerships, and investment from major employers and all types of businesses to fuel their programs and strategic actions. These changes in the economy continue to push the practice of economic development into increasingly holistic and partner-driven territory – where the talent development and infrastructure systems that help this independent sector of the workforce flourish and compete become just as important as the systems that keep businesses in business. How do chambers and EDOs engage this workforce? How do you connect these workers with work? How do you prepare regional businesses and workforce development resources for this changing definition of jobs?